By Geoffrey Smith
Investing.com -- U.S. stock markets opened mixed on Wednesday with 'old-economy' indexes outperforming the Nasdaq after another couple of barnstorming quarterly updates from the retail sector.
Target (NYSE:TGT) stock rose 7.3% and home improvement expert Lowe's (NYSE:LOW) stock rose 1.4% after both handsomely beat expectations for profit in the second quarter, corroborating the trend set by Walmart (NYSE:WMT) and Home Depot (NYSE:HD) on Tuesday.
However, that failed to translate into a broader rally, on the perception that the results reflected more a reallocation of spending towards essentials and smaller fixer-upper jobs during the pandemic, rather than any intrinsic strength in consumer spending. That sense was reinforced as TJX (NYSE:TJX)'s earnings showed the vulnerability to lockdown orders of retailers without adequate an e-commerce channel. TJX stock fell 8.9% after the company posted a $214 million net loss for the quarter.
By 10:15 AM ET (1415 GMT), the Dow Jones Industrial Average was up 105 points, or 0.4%, at 27,884 points. The S&P 500, which hit a new record high for the first time since February on Tuesday, was up 0.1% and the Nasdaq Composite was flat.
It was an active morning for biotech with Gilead (NASDAQ:GILD) stock falling 2.9% to its lowest since February after the Food and Drug Administration refused to approve what analysts had expected to be a blockbuster drug for rheumatoid arthritis. Gilead, whose experimental antiviral drug remdesivir was seen only weeks ago as adding billions of dollars to the company's value, is now trading below where it did before the pandemic. ADRs in Galapagos (NASDAQ:GLPG), Gilead's Dutch partner in the project, fell 25% to their lowest in over a year.
It was a different story for Momenta (NASDAQ:MNTA), which surged 69% after Johnson & Johnson (NYSE:JNJ) agreed to buy it in a $6.5 billion deal. J&J stock was up 0.6%, with at least one Momenta shareholder complaining that the company had got it on the cheap.
On the flip side, Sorrento Therapeutics (NASDAQ:SRNE) stock fell another 7.3% after the company fired its chief financial officer Jiong Shao. The company had talked up the identification of an antibody that it claimed provided a 100% reliable defense against the Covid-19 virus back in May, only two months after warning that it was running out of cash. Sorrento has attracted the interest of more than one short-seller due to doubts about its governance, but still has a market value of nearly $3 billion.
Movements in most stocks were kept within limits by the expected release of minutes from the Federal Reserve's latest meeting at 2 PM ET, which comes against the backdrop of increased speculation that the Fed will adjust its inflation strategy in such a way as to keep interest rates lower for longer.